BTC: US-Linked Wallets Move $1B as Price Slides $4,000

US government-linked wallets moved 12,267 BTC, worth about $1 billion, on Oct. 8, while Bitcoin fell roughly $4,000. Galaxy Research flagged the transfer from an address holding assets recovered from the 2016 Bitfinex hack. After an intermediary wallet, 9,000 BTC worth about $739 million reached Coinbase Prime, Coinbase's institutional trading and custody platform.

Why it matters

The transfers extend three consecutive days of government-linked Bitcoin movements. Galaxy reported about 834 BTC moved on Oct. 6 and 8,428 BTC on Oct. 7, with some funds reaching Coinbase Prime. Its analysis also identified 2,456 BTC from previously unlabeled wallets that it attributed to US authorities based on their transfer patterns and destination.

That raises the possibility that publicly identified wallets understate federal Bitcoin holdings. Galaxy said a Coinbase Prime deposit address had received about 11,567 BTC since its first recorded use in December 2025, including funds from both identified government wallets and previously unlabeled addresses.

Some holdings are also entangled in legal claims. The government-controlled assets include Bitcoin recovered from the Bitfinex hack, where competing ownership claims remain, as well as Bitcoin linked to LuBian and Cambodian businessman Chen Zhi. A government wallet is not automatically part of the Strategic Bitcoin Reserve: the 2025 executive order covers qualifying Bitcoin finally forfeited to the government and allows certain court- or law-required disposals.

Market impact

Bitcoin fell from about $86,500 when the transfers began late Oct. 6 to around $82,500 on Thursday. The timing has renewed concerns about potential selling pressure, but a Coinbase Prime deposit does not establish that Bitcoin was sold or caused the price decline. The platform also offers custody without an immediate sale.

The destination of the remaining 3,267 BTC from the Oct. 8 movement, and how the government handles assets already deposited, may clarify its intentions. Any confirmed disposal would draw scrutiny, particularly if the Bitcoin qualifies for reserve treatment or remains subject to competing claims.